Issuer officials who said Treasury's final issue price rules are a vast improvement over earlier proposals nevertheless raised concern that they might discourage competitive sales of bonds or create problems for issuers if underwriters run afoul of the rules.

Radian Group May Sell Radian Asset

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Radian Group Inc. said Tuesday it may sell its financial guarantor subsidiary, Radian Asset Assurance, in an effort to raise capital to buttress its mortgage business.

Earlier today, Standard & Poor’s lowered the rating on Radian Group to BBB, from A-minus, and the rating on the mortgage insurance subsidiary Radian Guaranty to A, from A-minus. While the downgrades did not directly affect Radian Asset, the company said it was evaluating its strategic options, which could include a sale of the financial guarantor.

“These alternatives could involve a full or partial sale of Radian Asset,” the company said in a release. “The ultimate goal is to preserve the existing and future value of Radian Asset while also providing capital to Radian Group.”

Radian Asset is rated Aa3 by Moody’s Investors Service, AA by Standard & Poor’s, and A-plus by Fitch Ratings. The financial guarantor has claims paying resources of $3.2 billion and “minimal exposure” to the residential mortgage-backed securities and collateralized debt obligations made up of asset-backed securities that have caused so much trouble for other insurers, the company said in its release.

Radian Group has retained Lehman Brothers and Drinker Biddle to act as advisers as it evaluates its options.